Tom Mazzetta starts editorial campaign over countervailing duties on shrimp

With all of the media coverage on imported shrimp countervailing duties this week, the last thing I thought Id be doing with my free-time is thinking about the differences between imported and domestic shrimp. However, the attention being given to the recent trade action filed against imported shrimp got me thinking about the great hoax that has been perpetuated by some in the US wild shrimp industry regarding imported farmed shrimp.

For many years, weve heard that the major cause for the financial woes of domestic shrimp producers is the influx of cheap imported shrimp. Our domestic shrimp producers have continually bashed imported product in the media and with policy-makers, and have pursued any number of trade cases against imported shrimp in an effort to drive the price up or the demand down. In terms of full disclosure, Im friends with many domestic producers, and although I consider them to be good people, its been an exhausting steady drip of misplaced anger for as long as Ive been involved in the shrimp business.

The latest effort in this regard was filed by a group of domestic shrimp processors just last month, a trade case claiming that shrimp being imported from certain countries receive government subsidies leading to lower prices that theoretically harms our domestic producers in the marketplace.

Putting the merits of the case aside, the time has come to have a candid discussion about domestic and imported shrimp and the great hoax that has been perpetuated for far too long. There is an essential difference between shrimp. It is based on the costs of producing wild caught versus farmed shrimp.

We don't farm shrimp in the US, which is why it costs a heck of a lot more money to bring our domestic shrimp to the marketplace. Its not the same product as a farmed shrimp, and there is no way a wild product can compete on a price scale with a farmed product. Nor can wild caught shrimp compete in terms of volume, consistency, and year-round availability. The key to overcoming that significant cost difference is intense marketing to ensure consumers understand why they should pay a higher price for wild product. Wild Alaska Salmon comes to mind as a great example.

When you think about unfair trade, you generally think about identical products in the marketplace. Tires, steel, tin cans, mattress springs - you get the idea. These products are generally produced in the same way here and abroad. So if the market prices are drastically different between foreign and domestically produced tires, the case can be made for some sort of unfair market force that allows for it.

However, in the case of farmed and wild shrimp, farmed shrimp is supposed to cost less to produce than wild shrimp. Youd be running the worst farm on the planet if it doesnt. Excuse the logic here, but in my view, its ridiculous to contend that a strong wild shrimp industry in the US can only be achieved by punishing farmed product from abroad. Whether that punishment comes in the form of trade cases, general bad-mouthing, food safety scares, or policy provisions designed as barriers to entry, the overall goal is the same; to cause disruption in the import of farmed shrimp with the hope that it positively impacts the price of domestic wild shrimp. And heres the dirty secret; the price of US shrimp is set at the docks by the processors.

Curiously, that price is consistent throughout the domestic industry. The processors/distributors are the ones that ultimately bring the product to the marketplace. However, because they have failed to educate consumers as to the differences and why they should pay more for a wild product, they need to artificially keep their prices low and in-line with farmed shrimp in order to compete.

If thats the case, then of course fishermen are getting less for their product than they deserve. Naturally, they assign the blame to farmed shrimp producers as the only other competing force in the marketplace.

For those of us in the shrimp business this isnt news, but its clear from recent media reports and legal filings that many people out there still believe that the price of farmed shrimp is the reason the wild shrimp industry has never gotten the prices they feel they deserve.

The time has come to put an end to this hoax. As has been said many times, the key to success for wild US shrimp starts with domestic producers spending more effort [and money] developing and promoting their product and less effort racing to the bottom on price and then faulting farmed producers for it. Farmed and wild caught shrimp are two drastically different products that shouldnt be competing on price at the seafood counter or in the courtroom.

Tom Mazzetta